AMMAN — Prime Minister Jafar Hassan on Tuesday presided over the signing of the final technical and legal agreement for the Aqaba–Amman Water Desalination and Conveyance Project (the National Water Carrier) at the Prime Ministry.

 

The signing marks a major milestone towards reaching financial close in July, with construction and excavation works scheduled to commence this summer, according to a prime ministry statement.

 

The project’s capital cost is estimated at $4.3 billion, while the total cost, including financing, is projected to reach approximately $5.8 billion.

 

The final agreement follows 16 months of intensive government negotiations with relevant stakeholders aimed at optimizing financing terms, securing the best possible pricing, and refining the project's engineering and technical specifications.

 

The the National Water Carrier is a world-first strategic initiative that integrates several pillars: the desalination of 300 million cubic metres (mcm) of seawater annually, pumping systems capable of lifting water to elevations of 1,100 metres above sea level via a 450-kilometre pipeline network, and a heavy reliance on eco-friendly, cutting-edge renewable energy technologies.

 

Set to provide approximately 40 per cent of the Kingdom's drinking water needs, the project is expected to begin operations in 2030, serving as a vital cornerstone for national water security.

 

The 300 mcm annual output is nearly equal to the total capacity of all dams in the Kingdom and triple the production of the Disi project.

 

It will increase the Kingdom’s water supply by 40 per cent, effectively doubling the annual per capita share from 60 to 110 cubic metres.

 

Furthermore, it will increase the frequency of water supply from one day to three days per week across all governorates.

 

Under the final agreement, the price of water was reduced from approximately $3 per cubic metre in 2024 to an indicative price of $2.7. Current negotiations are focused on calculating inflation formulas to reach the final close.

 

The government will continue to bear the cost of water subsidies.

 

Currently, the Ministry of Water- Water Authority of Jordan’s (WAJ) debt accounts for roughly 12 per cent of the total public debt, a figure expected to rise in absolute terms due to the high costs associated with water projects, which are deemed essential and irreplaceable.

 

To mitigate this burden, the government plans to expand high-efficiency water projects, improve wastewater treatment, reduce water loss, and rationalise consumption.

 

The National Water Carrier will alleviate pressure on traditional water sources, improve supply consistency for the industrial, agricultural, and economic sectors, and ensure water sufficiency until 2040. The project also includes the establishment of solar energy fields with a capacity of 300 megawatts, covering 30 per cent of the project's energy requirements.

 

Implemented under a Build-Operate-Transfer (BOT) model, the project will be fully transferred to government ownership after 26 years of operation.

 

It is supported by 29 donors and international financing institutions, with total grants amounting to $663 million from the US, EU, Germany, the Netherlands, the UK, France, Italy, Japan, and the Green Climate Fund (GCF).

 

Private sector financing for the developer, Meridiam, totaling $2.9 billion, is provided by a consortium including the World Bank Group, European Investment Bank , European Bank for Reconstruction and Development, Islamic Development Bank, Proparco, The Japan International Cooperation Agency, GCF, and the OPEC Fund for International Development.

 

The government is contributing $722 million to the project, the largest budgetary expenditure for a capital project in Jordan's history, to lower the cost per cubic metre.

 

Additionally, a coalition of Jordanian commercial banks led by the Housing Bank will provide up to $1.1 billion in financing.

 

The Social Security Investment Fund (SSIF) will participate through this banking coalition and as an equity partner with Meridiam.

 

The National Water Carrier is a flagship project of the Economic Modernisation Vision and remains a top national priority for bolstering water security.

 

The agreement was signed by Minister of Water and Irrigation Raed Abu Saud and Meridiam CEO Thierry Déau, in the presence of several ministers, officials, ambassadors of supporting nations, and representatives of donor and investment institutions.